Fisheries business Oceana has refinanced its US debt as the $95.6m (R1.8bn) it owed is due in September 2024 and has become more expensive due to rising interest rates and a weakened rand.
The owner of SA’s Lucky Star brand bought US fisheries business Daybrook in 2019, taking on about R1.7bn in debt, at an exchange rate of R12/$.
Daybrook processes about 45% of US-caught Menhaden fish which is used in fishmeal for pet food and to produce fish oil for supplements.
Oceana’s earnings from Daybrook accounted for almost 15% of revenue in the 2022 financial year.
It now owes R1.8bn at a rate of R18/$. This is despite it repaying almost half the debt.
Daybrook had repaid $46.4m (R837m) when it started its refinancing bid.
Oceana embarked on the refinancing to strengthen the US balance sheet, manage interest rates and simplify the covenant and reporting structure.
The Bank of Montreal was appointed to arrange the refinancing. All current lenders participated and most increased their debt. The refinancing was 1.4 times subscribed, equivalent to an over subscription of $41.9m.
Oceana said this was due to the positive financial performance and credit evaluation of Daybrook.
It also repaid an additional $15m from cash generated during the year over what was required, so its new debt facility is worth $80.6m.
The debt is due in five years.
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